Another delay attributable to COVID-19, the construction of the Miami Beach Convention Center Hotel. Developers David Martin and Jackie Soffer have provided a “force majeure” notice to the City under the hotel development and ground lease agreement. Force majeure clauses deal with unforeseeable circumstances that affect the ability to fulfill a contractual obligation.
City spokesperson Melissa Berthier said the developers filed this notice on March 16: “Under the Agreement, the Developer is entitled to, and the City is required to grant, an extension of timeframe for force majeure and / or economic force majeure, which would include epidemics / pandemics such as COVID-19 and / or economic events that would compromise the developer’s ability to secure a construction loan commitment for the hotel project . “
“The exact period of the extension with respect to the hotel project has not been determined, as the city, county and state of Florida have been continuously operating under a state of emergency since the March 16 advisory was issued. been supplied to the city, ”Berthier wrote.
In an email to RE: MiamiBeach, Martin noted, “We remain fully engaged in the development of the Miami Beach Convention Center Hotel. Since announcing a management agreement with Hyatt, one of the world’s leading hotel operators, earlier this year, we’ve been working hard to finalize plans for the hotel’s construction. The team behind the new Grand Hyatt Miami Beach looks forward to realizing our vision for this project.
“The public health emergency caused by the pandemic affected all sectors of business and society, and prompted our team to file a required legal opinion which commemorated the undisputed and unpredictable delay caused by the pandemic,” said he declared. “We are all looking forward to the day this pandemic is behind us. We remain confident in Miami Beach’s long-term future as a premier business, leisure and convention destination, and look forward to the grand opening of the Grand Hyatt Miami Beach.
Announcement that the 800-room hotel would be a Grand Hyatt was made during Miami Beach Mayor Dan Gelber’s state of the city address in February, just weeks before the state of emergency was implemented. The 185 sq. Ft., 17-story hotel will be built at the corner of 17th Street and Convention Center Drive. The site, adjacent to the convention center and the Fillmore Theater, contains a small above-ground parking lot and a city-owned building that will be demolished.
During the February announcement, Martin said the hotel was in the process of approving and expected shovels in the ground “in the coming months, a vertical construction year. next , with completion by the end of 2023.
The delay in building the hotel means projected revenues to the City, which are in the face of budgetary challenges due to COVID, will be pushed further. In a note of January 2019 to the Commissioners with a view to their vote on the emphyteutic lease for the development site, city manager Jimmy Morales noted that the developer’s projections for the hotel’s first year of operation total $ 6.2 million, which represents the land lease payment, property taxes paid to the city, tourist taxes and taxes on food and beverages.
This estimate “does not include an additional recurring annual payment of $ 1.5 million in Miami Dade County Convention Center Development Tax (CDT) once the hotel opens,” Morales wrote at the time. . “In addition, resort tax revenue would also be generated at other hotels and restaurants by additional visitors to the city. As such, the City is expected to start receiving millions of dollars in revenue a year earlier. “
In the Budget documents for fiscal year 2021 presented to the city commission last week, Morales said: “Given the current uncertain economic conditions in the hotel industry and financial markets, we do not yet know when construction of the hotel will begin and therefore , when the hotel opens.
Since May, the Palais des Congrès has been the site of a Walk-in and drive-through COVID testing facility which uses part of a parking lot where the hotel will eventually be built. Internally, the state operates a alternative care facility in the event that local hospitals see an increase in the number of COVID patients. It has remained unused since its inception in April.
Photo: Michael Timmerman